Skip to main content

tv   The Call  CNBC  March 8, 2010 11:00am-12:00pm EST

11:00 am
exchange and there has been discussion that they are going to loosen their pay for the dollar and make friends with others. like the country with which they share the longest boarder in the world being the former ussr. i'm skeptical. >> yes. indeed there was -- playing to the galleries. >> i think they are. >> did you see the natural gas -- more i-ing in australia today. china teaming up with shell to make a bid. >> that's very interesting. they are buying -- resources -- anywhere and everywhere they can find that. >> particularly natural gas. that's it for this program. thank you for watching "squawk on the street." >> we will see you the rest of the day, afternoon at 2:00, "street signs." but now -- >> "the call" is next. good morning and welcome. trish regan live at the new york stock exchange. we have the nasdaq at an 18-month high. we are go to talk about just exactly where you need to be investing in technology right now. good morning, larry. >> good morning, trish. i'm larry kudlow.
11:01 am
president obama in philadelphia. he's making one final appeal for public support on health care. we are going on take it to you live. we are bogey to go to melissa live. >> justice department looking into whether hedge funds played a role in the fall of the euro. we are going ask are hedge funds being blamed for everything? this is "the call" on cnbc. stocks taking a breather from the ral i don't the plus side. aig on the rise after another multibillion dollar sale. more on that later. february same store sales. take a look at how the s&p 500 is trading. trading on the plus side. up better than a point. the dow right now is -- i don't know if we will show you. s&p, yeah, it is essentially flat on the session. dow right now is bottom of the session as well. climbed its way back from being in negative territory. nasdaq is up about a quarter of a percentage point on the day. trish, what's happening on the
11:02 am
floor? >> health care stocks today. light of the president's speaking on the very issue. hlm index slightly lower. look at the accounting of the health care plan. it is something. for ten years of revenue gathering, you have six years of spending. if did you that in corporate america they probably would convict you of fraud and lock you up. that would be that. yet, this is the plan. it is one that makes a lot of folks down here nervous because we know that someone is going to have to pay for it at the end of the day. that's going to be all of us. i want to bring in bob pisani, looking at some of the comments the president has ahead of the speech. we got excerpts from it. good morning. >> you would think it would be tuf to insert goldman sachs into the health care. >> that's easy pick. >> lot of controversy. last week, goldman sachs' analysts noted an insurance broker made a comment they thought was important. they are going the keep raising rates in o in the insurance business because even though they know they lose customers by doing that, there's little
11:03 am
competition in the insurance industry they can make money on the existing customers and raises an interesting question. that's rather rhetorical way of putting it. the fact is that there isn't enough competition in the industry and how do you get more competition. his plan may or may not the right one. it is a legitimate question to raise. >> it absolutely is. getting competition across the state lines, that's really critical. you know, i keep looking at this. and i say gosh, you know, i mean, you look at baby boomers. they have the benefit of lower taxes for generations. look at my generation or their generation, you should say, decades. the reality is that we are all going to have to pay for this somehow. so that they can have yet another entitlement program. >> it is a difficult call. we need more competition. one of the -- trying to figure out down here, who would benefit here? one of the only things that's very obvious to say is the companies that have big medicare plans, they are the ones that would benefit if the president -- you look at all these companies are very big in the business.
11:04 am
they are not having gigantic runs in the past few weeks because no one has a clue if anything will pass. there's in way to play this. i get questions all over the place about where -- whether it will happen or not. i can tell you, they would benefit clearly and to -- hospitals would be under pressure but whether or not that's actually going to happen is not clear. >> question is what will happen to the country. we will move on. we are going talk about how the mood is feeling a little better here. everybody is a little more cheerful. some open tim its billion europe. >> yeah. i think the important thing here is not only greece under more control but downplay portugal this morning. adopting an austerity plan a fraction of what they've got. right now they are spending, deficit about 8% of their gdp. ours is 11% 37 they are going try to drop that down to 3%, 4%. important thing is they are getting ahead of this. we vant haven't brought up portugal. nobody mentioned them yet as the next shoe to drop. >> perhaps ireland and perhaps spain could take a page out of their book. >> ireland is already well ahead
11:05 am
of everybody. >> maybe the u.s. with this austerity budge set maybe that's a good idea. >> bob pisani good to see you. back to larry kudlow. nation's top economists are meeting today. drilling down on a host of big topics from financial regulation to the next fed governors. cnbc's steve liesman is there at the name conference in arlington, virginia. are they bullish or bearish? >> you know, they are pretty bullish, i think. concerned about things like the deficit. awant to talk about the list of who is on the list to replace -- fill the three fed vacancies and i one to tell you, larry, unfortunately john taylor has not -- his name has not come up. what i can tell is that treasury secretary tim geithner is the one in charge of the process. however, he's working closely with larry summers, you know, over at the white house on filling these three fed vacancies. one of which will be the vice chairmanship when don cohen leaves in june. what are the names that have come up? peter diamond has come up.
11:06 am
professor from m.i.t. written a lot about taxation. and pension funds. and those sorts of things. so he would be a good person to be commenting on fiscal policy and guiding the fed while -- navigates monetary policy. fiscal policy. janet yellen's name has come up. she had been at the board in washington in the '90s. question is were she would come up to "the new york times" and points thought morning she would have to take quite a pay cut from what she makes at the san francisco fed to come to work in washington. something the fed should work on. alan kruger, assistant treasury secretary, nationally known expert on labor, is involved in the vetting process but his name is also out there as one perhaps as a potential fed governor. finally, christina romer was a until for the job. our understand sheeg does no want it. what's the fed need? the fed needs another macro economist because when don cohen leaves, bernanke will be the only one there and does not have anybody with too much of an international perspective. there's also talk about whether or not somebody more from main
11:07 am
street who can help guide fed policy from a more realistic standpoint. larry, unfortunately, the -- credential of monitorist is not out there very much. >> excuse me? shocked. >> i believe that we need a real housewife on the federal reserve board. we need a gal who goes out and shops for food and gasoline. so she understands the true meaning of the price index. a real housewife. >> houseman. houseman as well, larry. >> houseman could work as long as he or she is shopping every day. >> as long as the person that buy it is groceries and gasoline, in a make a lot of sense. >> now stay with us, steve liesman. let's talk more about the future of the fed. and the next fed governor. joining us now is vince rinehart. former fed director of monetary affairs. good morning, vince. vince, i'm not going to get john taylor and i'm not going to get a real housewife according to steve liesman. who are we going to get? >> first things that has to make a decision what kind of vice chairman they want. there's two models.
11:08 am
the vice chairman could be the chairman in waiting. that's why you hear senior names like christina romer or janet yellen or the ceo in charge of bank super sxrigs regulation to reform that side of the fed. they have to make that decision. the other -- what they certainly need is steve noted is someone who has an academic background like chairman bernanke and so that he can -- that person can watch his back. >> another academic. that's desperately what we need. another academic. >> she slots. >> i'm sorry. >> who would you suggest? i mean, you have been there. who do you think would be the best for the job? >> they have to make their december identification vice chair. i don't think that a chairman in waiting works because having somebody sitting in the wing for three years isn't good for the institution. it also means that it is -- it is a risky bet for that person. there's an election between then and now, after all. i think that the best thing that
11:09 am
they could do on vice chair is elevate governor turulo who already has that set of responsibilities. >> these are all fine people. but they are all target rate. i think the high tide of the anti-inflation price stability was roughly from the early '80s with mr. volcker through the middle '90s. manly johnson, wayne angel, robert heller. they replied a lot of tanks to market prices. commodity prices including gold, steve. i don't hear any such thing from this list. >> month. that's not where the fed is at right now. i don't think that's where macro economics is at. the idea of sort of monday tourism is faded to the become ground. >> no, no, commodity price. not monitorism. i'm making a much different case. i'm saying -- >> use real-time market prices as a guide for whether the
11:10 am
fed -- that includes commodities and including gold and sxoyl includes the exchange. exchange rate of the dollar. that's correct. that is exactly right. it is -- it is the housewife theme. >> what -- my understanding, larry, is that they take all of these things into account but that they are very wary of taking asset prices as a measure of broad based or aggregate rise in the price level as a result of monetary policy. that they just have not had too much success of trying to create models that work that way, larry. i understand what you are saying. i think that they appreciate them as individual and they don't want to make them the sole input. >> martin friedman rolling in his grave? sit over for monitorists? >> i don't think there is any way you can get out of this without a board of governors. the white house has three slots. it is going to be somebody -- three people that are a little -- >> even more in that direction. i hate to say it, you don't think that's how we got in the mess in the first place?
11:11 am
>> how do we have -- >> larry -- >> this is the moment, it seems to me, vince and steve to transition afwra that. that's why my commodity price argument -- that's the argument i'm make. >> larry -- they just announced this morning that they were expanding the counterparties for reverse repos to money market funds. they are getting ready. they are putting up a pretty decent arsenal together, larry, to drain liquidity and to tighten policy. they are not say thing will be policy. but they are getting redid to do that. >> they originally said that september they were already talking to counterparties and they are going to be selling treasuries. yikes. aren't they already selling a lot of treasuries out there for other things like floating debt? >> hold on, hold on. >> go ahead. >> they are talking about their exit strategy and they are going to have lots of individual bitsive news to reinforce that they intend to exit when the time comes. given the economic outlook, they don't have a reason to execute
11:12 am
any time zbloon have they buried the tailor role john stay slor a real smart guy and that taylor role if it had been enforced between 2002 and 2005 would have made a lot of this not happen. >> it would have to be live at the federal reserve to be buried now. i don't think that it really was ever a key element of policy making. what it was always -- was a cross check on the discretionary policy. they look at the taylor rule. i can guarantee there are plenty charts of and tables. every site -- they look at it and to check their judgment. but basically, it is -- as the chairman explained in january, at the meetings, they are discretionary policymakers informed by big models. >> targeting the unemployment rate. that's their -- targeting the unemployment rate. >> it is half their mandate. they have a reason to look at it. >> depends how you interpret that mandate. steve, basic lynn employment
11:13 am
targeting. is that right? >> unemployment and stable prices. >> okay. >> with an emphasis on stable prices. i think stable prices come before unemployment for the fed. >> give me a housewife. give me -- >> let's leave it there. >> a housewife. >> thank you so much, guys. >> or house person. let me say houseperson. >> that's more equitable, larry. coming up next, one of the most powerful bull market runs of all time hits the first anniversary this week. find out what traders are saying about stocks ahead and i will run down. >> president obama getting ready to speak of need for health insurance reform. we will carry his speech live. with fidelity, you can take your trading around the world,
11:14 am
because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.
11:15 am
11:16 am
. we are itting for president obama to speak live. he has had very harsh words for health care insurers. as soon as it happens we will bring it to you live. >> mean tile, we will get reaction here on the floor of the new york stock exchange from two cnbc contributors, peter costa with us. you look at the market. 66% as of one year ago on the s&p 500. the question is can we dhont kind of momentum. you know, peter, i will start it off with you. you were just telling me during the commercial break have you a lot of concerns. what are they?
11:17 am
>> unemployment. continue to beat on that one until we get unemployment to much more reasonable level. that can take two years to bring down to 5%, 6%. we are looking at housing that's still not recovering the way it should. and i have a feeling about howing which i'm going to do more research it. i started thinking about it. this may not get to where it was at previous levels. the economy has to build off something else. >> you are looking at macro economics, fundamental issues that really cause you to take a pause here and say i don't know -- the government debt. potentially higher taxes. health care. gordon, you are saying not so fast. you still think that there's opportunity here. how can there be given the situation peter's outlined? >> look, what kind of a reversal will we have? the real estate markets were going to immediately revert back to the highs. this is a process and we are in the middle a process.
11:18 am
reasonable signs. starting to see m&a activity coming back. corporate buyback activity. >> but i'm just going to hold you there quickly. i know larry wants to get in as well. m&a activity, we had are a guest on the other day i thought we had a valid point. he was saying tend to see m&a pick up at the end of a bull run. >> last year, between m&a and corporate repurchase, we were at lows below 2002. and now this year, you are starting to see a little bit of activity. not just here. but internationally seeing it in a lot of different countries. different places. the point here, trish, is that you are starting to see guys getting creative and trying to find out ways to maximize. i think the equity market may not be as bad as peter suggest. >> peter, let's look at this housing important, unemployment is important. i'm not sure it has a thing to do with near term stock prices. 70% rally with terrible rising unemployment. what about profits? the analysts are moving to $80 a
11:19 am
share for 2010. and the discount rate is 3 opinion 7% on government bonds. you have 13 to 15 times earnings. that's not expensive with the 370 discount rate for treasuries and zero fed funds rate. why can't stocks go up another 15% in the short run? >> well, you know, it is possible that the can market can go up another 3%, 4% in the short run. when you look at, you know, looking at a micro economic and i'm looking at macro. you know what, you -- you have your growth. how much more growth are you going to get on the backs of having 10 million people or 10% of the united states employment -- unemployment, you know, you are not. the growth just not there. housing. >> what run are we talking about? how short is it? >> three to six months. i don't know. i'm not smart enough to know. i'm saying gordon, would you explain to peter how important profits are that they are the mothers' milk of stock prices
11:20 am
and profits are surging and as long as the fed keeps interest rates cheap, long run that may be bad. in the short run that may be bullish as all heck. explain to them, gordon. teach peter. >> i have been trying to explain to peter what's been going on for a long time. he doesn't get. >> it your problems are on the back -- these companies are building profits on the fact that they have 20% less employees. i mean, you know what, there -- only benefit that is for the companies. it is not the benefit for the u.s. economy. >> ultimately -- ultimately profits are the -- best source of stimulus for the economy. they are much better than government spending. they are much better than debt finance. much better -- i'm staying with the prove story. i think that's what this stock rally has been all about. easy cheap money and great profits. that's the deal. >> yeah. i guess one of the questions and maybe peter, this is what you are alluding to, how much longer can we continue seeing these kinds of profits if we don't
11:21 am
have the demand, consumer demand there? we have seen reduction in the inventories and spending on the business. business level. at some point that doesn't translate to jobs and, therefore, consumer demand, how much longer can it go? >> well, i -- i'm telling you, i don't think that you are going to see much more movement on the upside. you are still -- this economy is 70% based on consumer spending. consumers are still very cautious. when you still think that you are -- possibility you may lose your job, you are not going to go out and buy that $3,000 flat screen tv made in china. that money is being repatriated to another country anyway. >> retail sales for last month. >> that's what i'm saying. i'm not reading the data the way you are looking at. top-line growth. you are seeing the analysts now getting in behind these stocks. i mean, it seems like the green shoes are shooting to materialize here. short term. interest rates are fill low. you have to think the fed will lift them a little bit but are going to take their time. i mean, near term, i'm just -- we are seeing the trend just go higher. band is getting higher. >> mustard seeds, mustard seeds.
11:22 am
we planted those mustard seeds, they are growing. i'm not saying forever. i don't like washington's policies either. what i'm saying is or begancally, internally, profits are the mother's milk. when you combine that with the zero fed interest rate, i just don't think you can fight the tape on this. >> i'm losing the tape battle now. you have to remember the -- >> i lost eight few times myself. it is okay. >> reason you use mustard seeds, put them on the ground and worms come out of the ground looking for the mustard seed. >> we don't want the worms. we don't like the worms. all right. thanks so much. appreciate it. i will take it back over to you two. >> aig and metlife reaching a $15 million deal. >> the nasdaq is at its highest levels in 18 months. should you invest in tech? two analysts will give you their take.
11:23 am
11:24 am
so listen, we -- we -- this
11:25 am
is just an extraordinary crowd. and -- but -- i love you back. there's some people i want to -- i want to point out who are here, who have been doing great work. first of all, give leslie a grape round of place for her wonderful introduction. somebody who has been working tirelessly on your behalf doing a great job, the secretary of health and human services, kathleen sebelius, is in the house. one of the finest governors in the country, ed rendell is in the house.
11:26 am
everybody notice how great ed is looking, by the way. he's been on that training program. eating egg whites and keeping his cholesterol down. your senior senator, who has just been doing outstanding work in the senate, arlen specter is in the house. one of my great friends, somebody that supported me when nobody could pronounce my name, bob casey. >> let's bring everybody in. >> while he's doing the introductions. we will go back as soon as he starts the substance of the speech good right now, i sense that this conversation and debate is about the insurance
11:27 am
companies. the love fair between obama and the insurance companies seems to be over. they are not backing his plan anymore. and as they seem to last winter or last summer. and a lot of this is about cost and premiums. and the question, trish is i want to ask this, get your take. if governments, let's say, state governments and the federal governments, are mandating services and procedures that the insurance companies have to insure, does that by, you know, definition, force premiums higher? i'm going include the pre-existing, so-called pre-existing health problems? some absolutely. absolutely. because it is taking choice out of the equation, larry. you know that as well as i do. you know, these companies should have the ability to work on a competitive basis. i have the opportunity to go lout and pick the best health care plan for me because it is going to provide the best coverage. not because the government says that it has to provide x, y, z. >> i mean, we are looking at
11:28 am
excerpts from the speech he about to give. he will talk about companies denying people coverage because of pre-existing conditions. the bottom line is, though, somebody has to pay for it. you know, whether it is the insurance company and recoup it, you know, by raising your premiums, the company that you work for, paying for it. you are not getting it in your salary or government paying for it in taxpayers who are doing it. it seems like this is why we get back to the question of lowering the costs per -- so to speak. real problem is the costs. someone has to pay for. >> it i don't see how, trish, i don't see how -- melissa's point, i don't see how without real choice in competition, without health save accounts, without interstate insurance, or just give the tax break to the individuals and 23578 lease rather than the businesses. to me, that would create a real vibrant free market pro-competition, lower the cost curve. to me, that's the only way out of this. >> you enable all americans to get some form of health coverage which is what we all want at the end of the day. question of how you will go about doing and it the way the
11:29 am
administration is talking about doing it, it is really coming down to yet another entitlement programs that our generation is going to have to pay for and our children are going to have to paw for. that's the rememberality of this situation. it is not necessarily going to improve health care. but it will raise all of our taxes. >> up to 96,000. look at the health care entitlement, four times the poverty line, it would go daschle gentleman built would go to 9 6,000 perfect family of four. that's the greatest middle class entitlement in the history of the country. >> this is -- if you started the substance of the speech, actually. we are going go listen in now. >> when you are in washington, folks respond to every issue, every decision, every debate, no matter how important it is, with the same question. what's this mean for the next election? what does it mean for the poll
11:30 am
numbers? is this good for the democrats or good for the republicans? who won the new cycle? that's just how washington is. they can't help it. they are obsessed with the sport of politics. so that's the environment in which elected officials are operating. you have seen all the pundits pontificating and talking over each other on the cable shows and yelling and shouting. they can't help themselves. that's what they do. but out here, all across america, folks are worried about bigger things. they are worried about how to make payroll. they are worried about how to make ends meet. they are worried about what the future will hold for their families. and for our country. they are not worried about next election. we just had an election.
11:31 am
they are worried about the next paycheck. or the next tuition payment that's due. they are thinking about retirement. you want people in washington to spend a little less time worrying about our jobs, little more time worrying about your jobs. despite all of the challenges we face, two wars, the aftermath of a terrible recession, i want to tell everybody here today, i am absolutely confident that america will prevail.
11:32 am
that we will shape our destiny as past generations have done. that's who we are. we don't give up. we don't quit. sometimes we take our lumps but we just keep on going. that's who we are. but that only happens when we are meeting our challenges squarely and honestly. and i have to tell you, that's why we are fighting so hard to deal with the health care crisis in this country. health care costs that are growing every single day. i want to spend time talking about this. the price of health care is one of the most punishing costs for families and for businesses and for our government. it is forcing people to cut back or go without health insurance.
11:33 am
it forces small businesses to choose between hiring or health care. it is plunging the federal government deeper and deeper and deep near debt. the young people who are here, you have heard stories, some of you guys still have health care while you are in school, some of you snail object your parents' plans, but some of the highest insurance rates are among young people. it is getting harder and harder to find a job that's going to provide you with health care. and a lot of you now feel like you are invincible so you don't worry about it. but let me tell you, when you hit 48, you start realizing things start breaking down a little bit. and the insurance companies continue ton ration health care based on who is sick and who is healthy. on who can pay and who can't
11:34 am
pay. that's the status quo in america. it is a status quo that is unsustainable for this country. we can't have a system that works better for the insurance companies than it does for the american people. we need to get families and businesses more control over their own health insurance and that's why we need to pass health care reform. not next year, not five years from now, not ten years from now. but now. since we took this issue on a year ago, there have been plenty of folks in washington who said
11:35 am
that the politics is just too hard. they warned us we may not win. they argued now is not the time for reform. it is going to hurt your poll numbers. how's it going to affect democrats in november? don't do it now. my question to them is when is the right time? if not now, when? if not us, who? think about it. we have been talking about health care for nearly a century. i'm read agbaiography of teddy roosevelt now. he was talking about it. teddy roosevelt. we have failed to meet this challenge during periods of prosperity and also during periods of decline. some people say don't do it now because the economy is weak. when the economy was strong we
11:36 am
didn't do it. we talked about it during democratic administrations. and republican administrations. i have all my republican colleagues out there saying no, no, no, we want to focus on things like cost. you had ten years. what happened? what were you doing? every year the problem gets worse. every year insurance companies deny more people coverage because they have pre-existing conditions. every year they drop more people's coverage when they get sick, right when they need it most. every year, they raise premiums higher and higher and higher.
11:37 am
last month, anthem blue cross in california tried to jack up rates by nearly 40%. 40%. anybody's paycheck gone up 40%? i mean, why is it that we -- we think this is normal? in my home state of illinois, rates are going up by as much as 60%. you just heard leslie who was hit with more than 100% increase. 100%. one letter from her insurance company, her premiums double. just like that. because so many of these markets are so concentrated, it is not like you can go shopping. you are stuck. so have you a choice either no health insurance in which case you are taking a chance of somebody in your family gets sick, and you will go bankrupt
11:38 am
and lose your home and lose everything you have had, or you keep on ponying up money you can't afford. see, these insurance companies that made a calculation. listen to this. the other day there was a conference call organized by goldman sachs. you know goldman sachs. you have been hearing about that. they organized a conference call in which an insurance broker was telling wall street investors how he expected thingses to be playing out over the next several years. and this -- this -- this broker said that insurance companies know they will lose customers if they keep on raising premiums. but bus there's so little competition in the insurance industry, they are okay with people being priced out of the insurance market because, first of all, a lot of folks will be
11:39 am
stuck and if some people drop out they will stick make more money by raising premiums on customers they keep. they will keep on doing this for as long as they can get away with it. there's no secret they are telling their investors this. we are in the money. we are going to keep on making big profits even though a lot of folks are going to be put under hardship. so how much higher do premiums have to rise until we do something about it? how many more americans have to lose their health insurance? how many more businesses have to drop coverage? all those young people out here, after you graduate, you are going to be looking for a job, think about the environment that's going to be out there when a whole bunch of potential employers just tell you, you know what, we can't afford it. or you know what, we are going to have to take thousands of dollars out of your paycheck because the insurance companies just jacked up our rates.
11:40 am
how many years p. how many more years can the federal budget handle the crushing cost of medicare and medicaid? that's the debt you will have to pay, young people. when is the right time for health insurance reform? is it a year from now or two years from now? five years from now? ten years from now? i think it is right now. that's why you are here today. >> president obama making the case for his obama health care across the board. issue now is a handful of house members, house of representatives members, who are going to decide in the days ahead. that's the issue. if the house passes the senate bill, senate bill already passed 60 votes if the house passes that bill, i believe the president will sign it. so really not talking about the public. it is a few house members on the democratic side. who have to decide. >> the love fair with the health insurance companies over. oh, my goodness. that's gone. >> back to the politics of this
11:41 am
that you were talking about. if the democrats get the through, we talked about it potentially being a suicide mission for them. because constituents at the end of the day don't want it. that said look at it and say the democrats lose this battle and that they will be voted out of office. however, if they get this through, will they win the war? because they have gotten themselves another entitlement program that will be very, very hard to take away. >> yes. i agree. i was at the club for growth meeting down in florida this past weekend. i will say this. as a speaker and a vote getter, miss pelosi is very effective. i think you have to handicap this at 50/50. i really do. i don't think anybody can say yes or no right now. anyway, when we come back here on "the kaushlgs" hedge fund titans are being blamed for the euro's tumble. nasdaq at its highest level since 2008. find out where tech investors go from here.
11:42 am
11:43 am
[ crowd gasps ] [ announcer ] if you think about it, this is a lot like most job search sites. - they let everyone in, - [ crowd groans ] so the best people can't stand out. join the premium job site for only $100k+ jobs... and only $100k+ talent. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community. see it. live it. share it. on the human network. cisco.
11:44 am
crude oil is trading lower on the day. 21 cents lower. quarter of a percentage point. 81 buck as barrel.
11:45 am
it has been ten cents over the past month according to aaa. another penny overnight. no matter what data you are looking at, definitely on the rise. lowest price, $2.47, shy is an, wyoming. highest, $3.33 in honolulu. >> nasdaq at the highest level in 18 months. dube unone-year anniversary market lows is the time to invest in technology. joining me now the principal at gva research. roger kay, founder and president of end point technologies. terrific to see you guys. one of the big questions here is if you believe that it is now time to invest in tech mnology u have to believe in the recovery story. ale is one of the stocks you have highlighted here in your notes. one that you think could potentially have some additional upside. that must mean that you have a lot of faith in the american consumer right now. >> right. consumers are buying. i think apple is a special case.
11:46 am
consumers are buying apple. even when they are not buying other things. apple still has quite a modest ratio and -- you know, it is -- still -- i think a good buy. >> you think apple then is shielded from any kind of downturn and certainly i think you can make the case that it has shielded itself because people have continued to buy the products they are facing. >> shielded -- sorry. shielded, i think is too strong a word. but -- am has a number of good plays down. with the ipad coming out, they will be 2 million of the apple faithful go out and buy one immediately no matter what. then another couple of million people that are likely to take a good look at it and come in within a six-month period. i think even the ipad, which a lot of people questioned, as a product, they do pretty well. >> david, what do you think? i mean, april sl a company that an all-time high last week. it seems to continue to climb. at some point i don't know how much higher it can go. >> over the last two years am
11:47 am
has been leading the tech sector higher. ipad and product going out, not just domestically but overseas, the extent have you seen apple really taken up as broond a global basis, in this recovery versus what we saw in the past, primarily a domestic brand, the global aspect of apple is quite significant and one that gives the story further les beyond here. >> would you buy right here? is there a better investment out there? >> i think the buying ahead of the launch isn't a bad time to do it. harder for investors around other product psych nls the past, iphone and significant. also, with the company has done with the mac. now a good time to buy. $250 over the next six to 12 months is a reasonable targ tote have. >> let's talk about the technology and landscape overall. if you look at -- if you look at the economy, for example, we know that the consumer is definitely under a lot of stress right now. you look at businesses, you have to assume for technology do well, we have seen this over the course of the last year, there has to be some kind of
11:48 am
business-to-business spending. my question to you, roger, is whether or not you think that business-to-business spend sing going to continue even in the face of concerns businesses have regarding employment and the employment situation. even in the face of what they have regarding the tax structure in the coming years. >> right. i think the story with business spend sing it is going to pick up continuously through the year. and this year will be a year of recovery where 2011 will be a real year of building. you have got a lot of structural reason for people to buy technology now. particularly businesses. one thing is that their fleets are getting old and it is time to get better machines, new machines. benefits from windows 7 that are yet to be -- those cycles are beginning. but they -- still have a ways to go. we are on the front side of that piece of it. >> david, what do you think of the argument that is going on over at facebook now? they are talking about they need to show more of their billion answer sheet and be more transparent because they have more than on 500 investors out
11:49 am
there at the same time you hear the ceo talking about not wanting to go public any time soon. what do you think of the battle? what's right there? >> i think you are in a situation this right now with facebook is that you had -- have a mechanism in terms of secondary market for privately held shares. kit give insiders liquid if i and seen the digital sky investment of $200 million. facebook back in june of last year. i think we are really more structurally facebook and twitter and others aside who are rumored as being candidates for billion dollar ipos. we are on market now less likely to see ipos coming out of tech sector than you look at past cycles because of certain reforms put in place. >> thanks so much for joining us today. we are appreciate it. >> our pleasure. after the break, justice department telling hedge fund executives to keep their trading notes on theure own handy. speculation is arising. they had hand in driving down the currency. blaming hedge zblunds talk about conspiracy theories p.m. are hedge funds that powerful? are they being blamed for everything these days?
11:50 am
anncr vo: with the new geico glovebox app... anncr vo: can get help with a flat tire... anncr vo: ...find a nearby tow truck or gas station... anncr vo: emergency services... anncr vo: ...collect accident information. anncr vo: or just watch some fun videos. anncr vo: it's so easy, a caveman can do it. caveman: unbelievable... caveman: where's my coat? it was suede with the fringe. vo: download the glovebox app free at
11:51 am
11:52 am
hedge funds now manage $1.5 trillion in assets. barclays up 24% from the lowes point last april. as the justice department
11:53 am
investigates whether hedge funds were responsible for a drop in the euro. >> riddick us it is ridiculous. all right. hedge funds, alternative to equities? are they the ultimate boogieman? that's today's "call of the wild." let good morning, gentlemen. bernard, let me start with you. you think the hedge funds are boogiemen. i thought that the problem was the euro came from greece's default. and that their debt ratios and debt problems and public strikes. >> no. >> you are say being the hedge funds. >> larry, completely overstating my position. i think that give -- >> we all do that. >> given hedge funds' demonstrated ability to potentially inflict widespread disruption, global economy, absolutely believe that we need the tools and oversight necessary to proper properly regulate this rather opaque dinstri. having said that, i absolutely reject the calls from some on the far left that suggest that
11:54 am
hedge funds are to blame for all of the nation's ills and all of the downfalls in the global economy. i think that's a stretch. i think that's praising too much blame on the hedge funds and really giving them too much credit for -- >> how about the conspiracy theories gotten ridiculous? john carney, i'm sure you saw the articles about the -- super meeting of hedge funds in midtown manhattan. some townhouse. and they all got together and had this thought dinner where they talked about what to do next and out of that came this idea that the euro was going to tank and all go out and short it. this group was able to tank an entire global currency. is that possible? >> it is completely ridiculous. first place, the euro was already tanking long before the meeting took place. it took place in a restaurant. it wasn't a secret meeting. >> no townhouse? disappoint. >> a restaurant called a townhouse. and tape recordings were made. somebody produced a research report based on the meetings. this was more like -- >> sounds bore. >> yes. it is a lot more bore which is
11:55 am
the reason why when "the wall street journal" wrote it up they went with a more scandal ridden way. >> just as a sideline of this meeting, guess what. the euro stopped falling. since this meeting, euro stopped falling. >> not as powerful it is supposed to be. >> they got together again. >> that's my point, bernard. i just -- look, hedge funds have a lot of very good in people. they also have not so brilliant people and sometimes you can make the wrong call. in a free market setting, why do we even care? it is all going to even out. it will be what it is going to be. >> i will tell why you they care. they have an ability to cause wild swings. they can get billions of dollars of losses in a week that can dramatically gouge people's retirements. i think we are looking at a minimum level of oversight. number one. i think that the agreement to require hedge fund managers to be listed makes basic sense. hedge fund industries agreed to this. that -- it makes great sense to require hedge funds to give at
11:56 am
least a high-level overview of their exposure to stocks and bonds. and barring by banks. but i think that if you look at something like the volcker rule which would prohibit any proper prior terry investment from bank funds into their own investing, i think we ought to decide that on a case by case basis. >> what about taxing them? john carney. part of obama-omics to change the tax structure of hedge funds. no more capital gains. what do you make of that? that's part of this punitive class warfare. hedge funds. >> right. a big mistake. these are actual real capital gains. what they are trying to do is describe capital gains as income. just to get money from these guys. it is really just the political war. i don't even think they expect to raise the taxes. what they hope to do is get some campaign cash out of these guys by threatening to raise their taxes. >> wow. you are really cynical, john.
11:57 am
i like that. what about the idea the shadow banking community and trading of derivatives is responsible for a lot of what happened in hedge funds playing a big part? a big role in that? i mean, there's something to that argumentment. we haven't seen big changes in regular zblags i remember before the financial crisis struck, everybody only talked about the systemic risk posed by hedge funds. what happened? it was our banks things that blew up and our wall street -- mainstream -- >> heavily regulated sector blew up. most heavily regulated -- >> we have to go. we are out of time. >> came out pretty good. >> all right. gentlemen, thank you so much for joining us. appreciate it. that's going to do it for us on "the call." i will see you next on "power lunch." i'm melissa francis. >> i'm larry kudlow. i believe in free market economics. i will see you tonight on "the kudlow roar" at 7:00 p.m. eastern. national car rental? that's my choice.
11:58 am
because with national, i roll past the counter... and choose any car in the aisle. choosing your own car? now, that's a good call.
11:59 am
go national. go like a pro.


info Stream Only

Uploaded by TV Archive on